Anyone who has ever been covered by insurance knows that the policy or insurance contract is an important document. There are many different sections to the policy, and it's important to understand them all to make sure you're properly protected. Read on to learn more about one important insurance policy document known as an insurance endorsement.
Insurance Endorsements Defined
In insurance terms, an "endorsement" is an addendum or additional document that is attached to the insurance contract and serves to amend the policy in some way. To fully understand the impact of an endorsement, it's helpful to first understand the anatomy of your insurance policy. Your policy is made up of:
- A declarations page: Contains all of the important features of the policy including coverage, limits, and deductible
- The insuring agreement: Spelling out what particular things (acts or perils) are covered by the policy
- The exclusions and conditions page: Defines what conditions must be present for the insurance policy to apply
Endorsements are amendments that act to change some portion of the above sections of the insurance policy. Endorsements can serve a variety of functions, including:
- Exclusions: Some endorsements exclude coverage for certain types of claims
- Additional Coverage: Other types of endorsements add back in coverage that would otherwise be excluded
- Modification of Coverage: Endorsements can expand the scope of existing coverage
- Editorial Changes: Clarify the intent of the policy without altering the coverage
- Administrative Changes: Change details like a mailing address or correct the spelling of a name
Endorsements apply to policies for property and casualty insurance, which is insurance covering the things you own. Examples of property and casualty insurance include homeowners insurance, renters insurance, and car insurance. By contrast, an amendment to a life insurance policy is called a "rider."
Standard vs. Non-Standard Endorsements
Endorsements can be either standard or non-standard. A standard insurance endorsement is a pre-drafted document that's issued by an insurance service organization. These are popular among insurers because they are readily available, and have been previously tested by and interpreted by the courts.
A non-standard insurance endorsement is drafted directly by the insurance company. These sorts of endorsements can be drafted for a particular situation when no standard endorsement is available, but they often they are variations on a standard template. Endorsements drafted for single-use on a specific policy are known as "manuscript endorsements."
Mandatory vs. Voluntary
Endorsements can also be mandatory or voluntary. Some types of endorsements are added to the policy voluntarily, at the option of the insured party. You can decide to increase coverage through an endorsement, for example, by adding additional medical payment coverage to a car insurance policy. Or, you could decide to remove certain coverage, such as requesting an asbestos exclusion from general liability insurance.
Other types of endorsements are mandatory and must be included in the policy, whether you want them or not. Some endorsements are required under state law. For example, some states require an endorsement that makes the cancellation condition in a standard general liability more stringent, or increases the amount of notice you are required to give your insurance company before cancelling coverage.
Workers' compensation is a good example of policies that frequently contain endorsements. These types of policies often include one or more standard endorsement published by the National Council on Compensation Insurance (NCCI), as well as state-specific endorsements drafted by the bureau of insurance in that particular state.
Get Legal Help with Endorsements
There are various legal issues that can arise out of the interpretation of endorsements. If you are in a dispute with your insurance company about the interpretation of your insurance contract or endorsement, you might want to consider getting legal advice. FindLaw can help you find an experienced insurance lawyer in your area to help with your insurance case.